If anyone has any confusion with respect to how the Mortgage Field Services Industry will be in 24 months or less, look no further than the One Belt One Road policy of China now referred to as The Belt and Road Initiative (BRI). And if anyone wants someone to blame, go no further than the refusal of Eric Miller, National Association of Mortgage Field Services (NAMFS) Executive Director, to move the Industry out of the dark age. The quid quo pro which Miller sought to maintain in order to continue to receive his One Hundred and Twenty Thousand Dollar per year salary, has finally come to an end. More on that in a moment.
For nearly a decade now, Foreclosurepedia has focused upon the inequities of the Industry and the impact upon Labor. Time and again we have interceded upon behalf of victims only to realize that the victims had no interest in extricating themselves from the dire conditions they were in.
It is an Oliver Cromwell moment. Our Industry is at a crossroads. Whereas, previously, there was a shred of hope to change the Industry, with the acquisition of almost all Prime Vendor order mills by SoftBank, et al., there is none now. And where Foreclosurepedia served as a beacon of light, now it is looking more and more like it is time to pass the torch to the International Association of Field Service Technicians (IAFST). What has frightened the Eric Miller’s of the world is that our Message has been against the very establishment that he fought so hard to maintain. In fact, I am highly skeptical that even Miller, himself, could have predicted where we are today. And ironically, Foreclosurepedia predicted precisely where we are today — nearly two years ago! And where are we today? Glad you asked.
Today, Guardian Asset Management, Chronos Solutions, Ocwen, and Altisource are owned by New Residential Investment Corporation. Xome and Assurant – Field Asset Services are controlled by Nationstar, formerly owned by New Residential. Spectrum Field Services was recently sold off to a proxy firm Foreclosurepedia believes was orchestrated by Matt Martin, the former owner of Chronos Solutions. One Belt, One Road, as the Chinese would say.
So, who is the New Residential Investment Corp (NRIC)? Its parent, Fortress Investment Group, are the controlling arm of NRIC. And pay attention here class because the ride gets bumpy: Fortress was purchased by SoftBank, a Japanese technology firm for $3.3 billion in 2017, whose owner is CEO Masayoshi Son, currently the richest man in Japan. The Wall Street Journal had this to say, about SoftBank Group, recently,
SoftBank Group is leaning on its employees, including Chief Executive Masayoshi Son, for cash as the firm rushes to raise an ambitious technology fund amid volatile markets.
The Japanese company plans to lend up to $20 billion to its employees to buy stakes in its second giant venture-capital fund, people familiar with the matter said. Mr. Son may account for as much as $15 billion of that amount, some of the people said.
It is an unusual setup that would doubly expose SoftBank to a startup economy that is starting to show cracks.
I digress. Fortress bought Nationstar in 2006 and took the company public in 2012. Then, in 2017, Nationstar was scooped up by WMIH, Washington Mutual’s former parent and a formerly bankrupt firm in a similar space. In a slight of hand trick, WMIH did a reverse stock split and re-branded itself and Nationstar under the moniker of Mr Cooper. This is important as Nationstar now controls Xome, which recently acquired Assurant – Field Asset Services.
During the same period, between 2017 and 2018, “[NRIC] agreed to pay Citigroup $950 million for servicing rights on Fannie Mae and Freddie Mac backed loans with $97 billion of outstanding balances.” We also know that NRIC bought a substantial chunk of Ocwen — literally in shares and servicing — and Altisource. HousingWire had this to say in August, 2017,
Specifically, the companies said entered in an 8-year Cooperative Brokerage Agreement, which covers the $110 billion Ocwen MSR portfolio, as well as an approximately $6 billion non-agency MSR portfolio that New Residential agreed to acquire from PHH in December 2016.
NRIC, during the same period of time went on an additional buying frenzy and acquired and re-branded New Penn Financial. And in a final bite, NRIC ate up the bankrupted Ditech Financial whose second bankruptcy caused the bankruptcy of its owned firm Reverse Mortgage Solutions. It is in this deal that both NRIC and Mortgage Assets were both used as “stalking horse bidders” with respect to the handling of Reverse Mortgage Solutions, the now bankrupt provider of reverse mortgage servicing for HUD.
So, will the purchasing of the Industry by SoftBank, et al., be good or bad for the Industry? Well, I am hopeful that it will force a streamlining of technology. At the beginning of 2018, a new era of digital banking in Europe was born with the first phase enactment of Payment Services Directive. In fact, here is how JPMorgan Chase puts it,
Many financial institutions have long been hesitant to share data with third parties, even if their customers wanted them to do so. The relinquishing of control over customer data, their customers’ banking experiences and their money created more than enough worry among banks to avoid partnering with fintech companies over the years.
However, many financial institutions are realizing that fintechs are a much smaller threat than the potential for the likes of Amazon, Apple and Google to gain traction as big fintech players. These big tech companies are using the power of their customer analytics and excellent user experiences to pick away at traditional banking products.
It’s only a matter of time before customers demand more personalized services that offer everything from real-time interest rate management, real-time spending and budgeting tools or improved self-employed worker banking products.
NAMFS, though; Eric Miller and his Kleptocrat cronies, have fought tooth and nail in order to keep competition out of the Industry. Recently, I had occasion to speak with Paul Moe, Enterprise Director for Property Preservation Wizard (PPW) and PPW’s co-founder Matt Zoldowski. The problem was that PPW was incapable of pulling in bid approvals from ServiceLink. I want that to sink in for just a moment. PPW is incapable of pulling in the MOST CRITICAL MONEY MAKING TASK in all of the Industry! For well over a month now, neither Moe nor Zoldowski have chosen to reply to questions, pertaining to this problem, presented to them by a paying customer. In fact, it was ServiceLink whom had to shed light upon the problem. That is the sad state of affairs in our Industry.
For years, people like Zoldowski have fought to protect their fiefdoms. No matter the cost to Labor, Management, or the US taxpayer, the refusal to grant access to Application Programming Interfaces (API) has been as constant as the sunrise itself. The fearmongering put forth by PPW and others about the dangers of API access borders on the lurid tales espoused by such turn of the century movies like Reefer Madness. And I would go further in my belief that these refusals to provide API access while simultaneously benefiting upon Open Source code such as PHP and others, form a legitimate anti trust complaint.
It goes further, though. Labor has been relegated to the same stature as a Russian serf — krepostnoi krestyanin. Labor is forced to buy, multiple times over, duplicitous products from PPW, Pruvan, InspectorADE, and EZ Inspections. And none of these firms grant inter-connectivity. Foreclosurepedia had to fight to bring PPW and InspectorADE to the table to even contemplate such an idea. To best understand why the policy of the Miller Regime is so abhorrent, listen to what JPMorgan Chase has to say, with respect to the new European Union requirements under PSD2,
In order to facilitate these new providers, banks will have to provide their APIs (Application Programming Interfaces) to those that request it. This is quite a radical change that will provide a boost to the new generation of Fintech companies, fitting in with the EU’s desire to promote increased competition and innovation. The support for TPPs is expected to give consumers greater control and convenience as they will be able to centralise their account information and payment options on a single device.
This is anticipated to benefit the eCommerce market because it will give customers more flexible banking and payment options. There are also opportunities for merchants; for example, they could potentially utilise an AISP to get more information on a potential consumer, such as their account balance and payment flows and use it to make risk assessments. Or they could use the information to identify and target their most high-value customers.
In fact, according to the World Retail Banking Report 2017, more than 78 percent of banks seek to leverage APIs to improve the customer experience.
Does any of this matter, though? I think it matters to about three percent of my readership. You know, I originally created Foreclosurepedia in order to give a Voice to Labor. And for years we have carried the Voice from the trenches in which Labor operated from to as high as the federal judiciary in New Jersey. And in all that time, not one single Member of Labor ever volunteered to assist in the process. Truth be told, the average donation to Foreclosurepedia is about twenty dollars. And generally speaking, only one in three Quarterly Donation Campaigns generate revenue over one hundred dollars. So, if anyone believes that I have done what I do for money, they are sadly mistaken.
As I write this, many are asking me why Labor is not flocking to the Industry. You know, we have historically low black unemployment; hispanic unemployment is at 25 year lows; and the number of unfilled jobs in the United States is in the hundreds of thousands. To that point, why in the hell would any sane man or woman rush to do three dollar inspections? Why would anyone on earth want to shoulder the burden of tens of thousands of dollars to fix and flip properties and then wait 45 – 60 days only to have NAMFS members refuse to pay NOT BECAUSE THE WORK WAS NOT PERFORMED, but because the NAMFS member chose not to pay?!
What has been missed, by both Labor and Management, is that where there was once the ability to make a bridge and preserve autonomy of ownership, has now been abdicated by firms such as SoftBank. And anyone whom believes that it will work out well is high. At best, we will see the archaic technological platforms scrapped and an enormous swatch of former misclassified employees brought in house. At worst, a new and far more predatory environment within the distressed asset channel is evolving. The purchasing of nearly seventy percent of all Prime Vendors within the Industry is astounding. All of you reading this today — every single one of you — stated this would never happen. You were wrong. I was correct.
Foreclosurepedia has predominately secured its Mission Objectives. We have dramatically reduced fraud in the Industry. We have created an Association, the IAFST, to push legislative agendas to begin to unionize field service technicians, inspectors, and the administrative personnel inside of the Industry. And to that point, anyone whom says they are making more money than they need I invite you to discuss that on the Foreclosurepedia Podcast. And finally, the time has come for Foreclosurepedia to become a closed site wherein we will begin to focus our efforts upon organizing and moving into the disaster centric space which we believe is the new mecca, going forward.
It has been a good run. Never in the history of our Industry has there been such a robust and vibrant dialogue ongoing by Labor and Management. And never in the history of our Industry has it become a legal fact — a fact which Foreclosurepedia has stated for the past NINE YEARS — that there are no independent contractors. Under the Dynamex ruling and the soon to be passed California Assembly Bill 5 (AB5), what Foreclosurepedia has proffered that the 2010 Hurst v Buczek Enterprises now is becoming the law of the land. From California to Georgia to Massachusetts and New Jersey, the purposeful misclassification of employees, by NAMFS members, is being called out, for what it is, by the federal judiciary. And the fact of the matter is that there is no mistaking the salient fact that the Mortgage Field Services Industry today holds the indelible imprint of Foreclosurepedia upon it.
This will be the last free, public domain article Foreclosurepedia will release. In fact, our normal pricing for Industry Insider will more than double over the Labor Day weekend.